5 Required information Problem 9-4A Warranty expense and liability estimation LO P4 [The following information applies to the questions displayed below) On October 29, 2016. Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $20 and its retail selling price is $75 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 8% of dollar sales. The following transactions and events occurred. 2016 Nov. 11 Sold 105 razors for $7.875 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 15 razors that were returned under the warranty. 16 Sold 220 razors for $16,500 cash. 29 Replaced 30 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. 2017 Jan. 5 Sold 150 razors for $11,250 cash. 17 Replaced 50 razors that were returned under the warranty. 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A Part 1 11 Prepare journal entries to record above transactions and adjustments for 2016, View transaction list View journal entry worksheet No Date General Journal Dobit Credit 1 Nov 11 Cash 7.875 Problem 9-4A Part 1 1.1 Prepare journal entries to record above transactions and adjustments for 2016 View transaction list Journal entry worksheet